OPINION: Trump's foreign policy pledges should worry Boeing

11 May, 2018

SOURCE: Flight International

BY: Flight International

Airbus and Boeing are not victims of the US decision to unilaterally withdraw from a nearly three-year-old agreement with Iran.

It is true that on paper both had billions of dollars at stake under the terms of the Joint Comprehensive Plan of Action (JCPOA), which lifted sanctions on selling commercial aircraft to Iranian airlines.

But there is little evidence that either company had faith that the orders for hundreds of aircraft placed by Iranian carriers since 2016 would ever be fulfilled.

As a presidential candidate, Donald Trump campaigned against the underlying deal in the most vicious terms, which is partly why his supporters elected him in November 2016.

Even if he was not voted into office, the world's aircraft manufacturers still faced the uncertainty of Iran's ability to finance the deal without access to US currency (still prohibited under other sanctions not covered by the JCPOA). Moreover, the sanctions could always be re-imposed, if any evidence appeared suggesting Tehran had restarted its nuclear weapons programme.

Neither Airbus nor Boeing are particularly in need of new customers at the moment anyway. Some programmes, such as the A330neo or 747-8 and 777, could have used the help, but no-one expects the bottom line of either manufacturer to suffer noticeably without a few more deliveries to Iran each year.

Tehran is not the focus of any long-term concerns by Boeing about the Trump administration's foreign policy anyway.

If the demise of the JCPOA suggests anything, it is that Trump's campaign pledges must be taken seriously. And for Boeing, the prospect of punitive tariffs being slapped on China, triggering a tit-for-tat trade war, is arguably more of a worry.